Brexit Makes Drug Agency the Most Sought After Regulator in EU

Print 14 November 2016
Peter Levring, Chiara Albanese / Bloomberg

Forget the bankers: It’s pharmaceutical regulators who many European governments are trying to woo from London following the Brexit vote.

The U.K. capital is home to the European Medicines Agency, which employs almost 900 people and oversees the safety of drugs sold in the European Union, a market of more than 500 million consumers. Once the U.K. splits, the EU may look to relocate it elsewhere within the 28-nation bloc.

Foreign politicians are already circling, with Sweden, France, Denmark, Hungary and Bulgaria among those making pitches. As well as the prestige, there are economic benefits to housing an agency such as the EMA. Employees are paid by the EU, not the host city, which also gets to enjoy the rent money for the office space required. There are also benefits for local businesses such as conference organizers and local hotels.

The U.K. is making a strong case to keep the EMA: proximity to its own Medicines and Healthcare products Regulatory Agency. Experts provided by the British regulator perform about one-third of the EMA’s work, a representative of the Association of the British Pharmaceutical Industry said at a parliamentary hearing in London last month. The EU agency would have to call upon other member states to fill the gap.

‘Tremendous Disruption’

Moving the agency would also cause “tremendous disruption,” said Andrew Witty, the chief executive officer of Britain’s biggest drugmaker, GlaxoSmithKline Plc.

“A lot of staff are going to have to change positions,” Witty said Tuesday in a Bloomberg Television interview with Francine Lacqua. “Those who don’t leave have to relocate. This is a regulator who is keeping an eye on the health and safety of hundreds of millions of Europeans. You don’t want them with their eye off the ball.”

Dieter Weinand, who leads the pharmaceutical division at Germany’s Bayer AG, also voiced concern about the potential disruption, although he declined to comment on whether the EMA should stay or go.

“It is important that we look at what a relocation and that associated disruption might mean for the industry and the ability of such an agency to attract global talent, to continue to provide the expert service in a manner that we have grown accustomed to,” Weinand said in an interview from the unit’s offices in Berlin on Tuesday.

Scandinavia Calls

For other European drugmakers, the benefits of relocation might be worth some disruption. Novo Nordisk A/S, world’s biggest maker of insulin, is helping the Danish government to promote Copenhagen, home to the World Health Organization’s European headquarters.

“It seems quite obvious our top politicians should go all in to win the EMA for Copenhagen,” Mads Krogsgaard Thomsen, chief science officer at Novo Nordisk, said in an interview. 
“There are very few regions that can match this area in this field.”

Denmark has local rivals in Finland and Sweden.

Health Minister Pirkko Mattila told broadcaster Yle last month that Finland would have “strengths to take care of the tasks” of the EMA. Helsinki and Turku could house it.

Getting the EMA is a “big possibility” for Sweden, Anders Lonnberg, the country’s national coordinator for life sciences, said in October.

Having a bigger pharma industry will “show up in rising exports, in rising numbers of jobs, it should show up in the interest in Sweden as an investment country,” he said. Stockholm is already home to the European Centre for Disease Prevention and Control, an EU agency.

No Second Tier

Also in the favor of Sweden and Denmark is that following the Brexit vote, the bloc may look to reward countries outside the euro to show there isn’t a two-tier system of those who use the single currency and those who don’t.

“There are many countries that don’t have the euro and who are of the view that it should be an EU28 perspective that should guide the economic authorities and economic policy,” Per Bolund, Sweden’s financial markets minister, said in October.

Bulgaria, Croatia, Romania, Cyprus and Slovakia lack an EU agency, and so may have a chance. Lithuania’s foreign vice-minister Raimundas Karoblis says there is a priority for almost all EU members to have at least one regulator.

The big guns are still on the lookout to lure the EMA. Italian Prime Minister Matteo Renzi is offering Milan’s 2015 international Expo site as a potential location. The agency already has an Italian connection: Its executive director, Guido Rasi, is the former head of that country’s drug regulator.

Italian Connection

"We are trying to bring the European Medicines Agency to Italy," Italy economic development minister Carlo Calenda said in a interview with RadioUno. “This is something on which we are focusing a lot.”

Lyon, Strasbourg and Lille are the French candidates, President Francois Hollande’s spokesman Stephane Le Foll told reporters last month. Reports in Germany suggest Munich, Bonn, Frankfurt and Saarbruecken are all eyeing the agency.

It’s not just the EMA which is at risk of fleeing London. EU countries are also trying to capture the European Banking Authority, which employs about 160 people.

London isn’t giving up. George Freeman, the chairman of Prime Minister Theresa May’s policy board, said in October that the U.K. will pitch to keep the EMA.

“We’ve got to demonstrate that it’s not in Europe’s interest to take the EMA away,” he said. “Part of that sector’s challenge is to show that we may be pulling ourselves out of the regulatory framework, but we’re writing the playbook for 21st-century regulation.”

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